Home Front

A blog about the economy and the Sacramento-area real estate market.

March 12, 2010
Washington D.C. makes way for short sales

As Washington D.C. keeps realizing, nothing it does so far seems to really take the big bite out of the mortgage crisis. Negative equity, defaults and unemployment are still with us and worsening in many cases.
So now the federal government is turning its hopes to short sales. Those are where the lender takes a sales price below what it's owed to avoid foreclosing. It gives the seller a more graceful exit than foreclosure and is proving a sort of back door way of writing down principal. They're already big in Sacramento: nearly one in four January sales were short sales, according to the Sacramento Association of Realtors.

April 5 is the big rollout of the Obama Administration's Home Affordable Foreclosure Alternatives. There are incentives to lenders and borrowers to make more of these happen. Many questions can be answered in the Treasury Department fact sheet link just above.

One of the big obstacles is the holders of second-lien loans. They're balking at having to absorb their loss  - and making it harder for the first-lien holder to do the short sale. House Financial Services Committee Chair Barney Frank recently sent a letter to big banks telling them to get out of the way and write off these "seconds"

Looking for a good overview of the newest regulatory dance over short sales and second-lien loans? This Wall Street Journal piece explains it well.

About Comments

Reader comments on Sacbee.com are the opinions of the writer, not The Sacramento Bee. If you see an objectionable comment, click the "report abuse" button below it. We will delete comments containing inappropriate links, obscenities, hate speech, and personal attacks. Flagrant or repeat violators will be banned. See more about comments here.

What You Should Know About Comments on Sacbee.com

Sacbee.com is happy to provide a forum for reader interaction, discussion, feedback and reaction to our stories. However, we reserve the right to delete inappropriate comments or ban users who can't play nice. (See our full terms of service here.)

Here are some rules of the road:

• Keep your comments civil. Don't insult one another or the subjects of our articles. If you think a comment violates our guidelines click the "report abuse" button to notify the moderators. Responding to the comment will only encourage bad behavior.

• Don't use profanities, vulgarities or hate speech. This is a general interest news site. Sometimes, there are children present. Don't say anything in a way you wouldn't want your own child to hear.

• Do not attack other users; focus your comments on issues, not individuals.

• Stay on topic. Only post comments relevant to the article at hand. If you want to discuss an issue with a specific user, click on his profile name and send him a direct message.

• Do not copy and paste outside material into the comment box.

• Don't repeat the same comment over and over. We heard you the first time.

• Do not use the commenting system for advertising. That's spam and it isn't allowed.

• Don't use all capital letters. That's akin to yelling and not appreciated by the audience.

You should also know that The Sacramento Bee does not screen comments before they are posted. You are more likely to see inappropriate comments before our staff does, so we ask that you click the "report abuse" button to submit those comments for moderator review. You also may notify us via email at feedback@sacbee.com. Note the headline on which the comment is made and tell us the profile name of the user who made the comment. Remember, comment moderation is subjective. You may find some material objectionable that we won't and vice versa.

If you submit a comment, the user name of your account will appear along with it. Users cannot remove their own comments once they have submitted them, but you may ask our staff to retract one of your comments by sending an email to feedback@sacbee.com. Again, make sure you note the headline on which the comment is made and tell us your profile name.

hide comments

On October 14, The Sacramento Bee will temporarily remove commenting from sacbee.com. While we design the upgrade, we encourage you to tell us what you like and don't like about commenting on sacbee.com and other websites. We've heard from hundreds of you already and we're listening. Please continue to add your thoughts and questions here. We also encourage you to write Letters to the Editor on this and other topics.

Jim Wasserman on Twitter

Follow "jimwasserman" on Twitter

October 2013

Sun Mon Tue Wed Thu Fri Sat
    1 2 3 4 5
6 7 8 9 10 11 12
13 14 15 16 17 18 19
20 21 22 23 24 25 26
27 28 29 30 31